By Swissquote Analysts
Elon Musk Opens Tesla’s First European Factory
Topic of the day
Elon Musk formally kicked off customer deliveries at Tesla Inc.’s (+7.9%) first European factory outside Berlin, marking a milestone in the electric-car maker’s international expansion. Speaking Tuesday as he handed the first Tesla Model Y vehicles built at the plant to their new owners, the chief executive said the factory would create a foundation for both electric vehicles and the batteries that would store energy from wind and the sun. Mr. Musk called that a big step in the fight against global warming. Two years in the making, the factory will allow Tesla to build cars for European markets, which currently rely on expensive imports from the U.S. and China, and to tailor vehicles to local tastes, analysts said. The plant aims to eventually employ up to 12,000 people and make up to 500,000 vehicles a year, starting with the Model Y, a sporty crossover. Tesla has faced opposition to the Grünheide factory from environmental groups concerned about the amount of water the plant would require, and activists staged a protest on the sidelines of Tuesday’s opening.
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Driven by gains in banking and insurance stocks, the Swiss equity market ended trading on Tuesday with slight gains. UBS, Swiss Re, Credit Suisse and Swiss Life rose between 0.7 and 2.2 per cent. The SMI improved by 0.3 per cent to 12,203 points. Among the 20 SMI stocks, there were 11 price gainers and nine price losers. 33.85 (previously: 32.65) million shares were traded. The luxury goods stocks Richemont and Swatch recovered from the previous day's losses, gaining 2.0 and 0.7 per cent respectively. In contrast, Novartis lost 0.5 per cent. The pharmaceutical company has stopped investments and advertising in Russia because of the sanctions against the country. The company donates antibiotics, painkillers and other medicines to Ukraine and its border regions.
European shares advanced Tuesday, helped by banking gains after Jerome Powell said U.S. interest rates could be raised more aggressively. The Stoxx Europe 600 index rose 0.9% to 458.7 points. The CAC 40 and SBF 120 gained 1.2% and 1.1%, respectively. In Frankfurt the DAX 40 increased by 1%, while London's FTSE 100 advanced 0.5%. Cyclical stocks recovered, supported in particular by the Fed's optimism about a soft landing for the US economy. Steel companies Aperam and ArcelorMittal surged 3.3% and 2.1% respectively. Accor gained 2.7% and Klépierre 4.6%. Banks benefited from expectations of higher interest rates. BNP Paribas climbed 1.7% after announcing on Monday evening that it would suspend all new financing and projects in Russia. Crédit Agricole, which also said on Tuesday in an emailed statement that it had "suspended its activities in Russia", jumped 1.5%. Societe Generale pocketed 1.4%. SES shares added 0.5%. The satellite operator announced the acquisition of US company DRS Global Enterprise Solutions, a subsidiary of Leonardo DRS, for $450 million, or about €410 million. On the other hand, Air Liquide shares dropped 0.3%. The company unveiled its new strategic plan for 2025, called "Advance", which includes a sales growth target of 5% to 6% on average per year. However, some analysts said they were disappointed that no share buyback programme had been announced.
U.S. stocks rose and government-bond yields jumped, as investors shook off concerns that rising inflation will drag the nation’s economy into a recession. Tuesday’s moves had all three U.S. indexes up at least 2.6% for the month so far, building on last week’s gains. The Dow Jones Industrial Average rose 254.47 points, or 0.7%, to close at 34807.46. The S&P 500 climbed 50.43, or 1.1%, to 4511.61. The Nasdaq Composite closed at 14108.82, up 270.36, or 2.0%. Nike advanced after the apparel maker reported revenue that beat analysts’ expectations. Nike rose $2.90, or 2.2%, to close at $133.09. Technology stocks also rose, as investors returned to faster-growing companies whose shares were battered earlier this year. Shares of banks rose. Financial stocks helped lead the S&P 500’s gains, with the sector rising about 1.6%. Wells Fargo jumped $2.25, or 4.4%, to $53.39, while Signature Bank rose $10.30, or 3.3%, $321.18. Communications and technology stocks also gained. Etsy rose $5.98, or 4.2%, to $148.25, while Match Group jumped $4.28, or 4.3%, to $104.31. Amazon.com climbed for a sixth consecutive day, according to Dow Jones Market Data. The stock closed at $3,297.78, up $67.95, or 2.1%. Okta fell $2.98, or 1.8%, to $166.43 after a hacking group posted screenshots purporting to show that it had gained access to Okta.com’s administrator and other systems. The company said Tuesday that a preliminary investigation found no evidence of any malicious activity, adding that the screenshots were most likely related to a January security incident.
In Asia, major indexes closed with gains on Wednesday. Supporting factors are the positive Wall Street data and, especially in Tokyo, the continued strength of the dollar. The Nikkei index is the clear winner of the day with a plus of 2.8 per cent to 27,998 points. In Hong Kong, the index also rose significantly by 1.5 per cent, with profits on the other markets evolving noticeably smaller. Alibaba Group climbed by 4.0 per cent in Hong Kong - fuelled by the announcement that it intends to buy back a further 25 billion US dollars worth of shares. In Tokyo, this pushed Softbank's share price up by 7.7 per cent - Softbank holds a substantial stake in Alibaba. Nomura Research Institute declines by 5.5 per cent in Tokyo after parent Nomura Holdings (+2.3 per cent) announced plans to sell parts of its consulting subsidiary. In Hong Kong, Anta Sports is down 2.3 per cent. The sporting goods chain has spoken of a challenging 2022 sales outlook.
U.S. Treasury yields continued climbing on Tuesday, hitting their highest levels since mid-2019, a day after Federal Reserve Chairman Jerome Powell said policy makers could deliver benchmark interest rate hikes bigger than a quarter percentage point if needed to rein in inflation. The 10-year US Treasury yield rose nearly 9 basis points to 2.379% after jumping 14 basis points on Monday. The yield on the benchmark bond is now at its highest level since May 2019, while the two-year rate rose 4 basis points to 2.162% after jumping 18 basis points on Monday.
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